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Yes, the analysis of Copenhagen's property market is included in our pack
Considering buying a nice property in Copenhagen? You're not alone!
Many people are drawn to Copenhagen's Scandinavian charm and dream of owning a stylish apartment or a historic townhouse in this city.
Would it be a smart investment, though? Are property prices increasing in Copenhagen? How much does it cost? Is it better to invest in Indre By or Vesterbro? What are the property taxes? What yields can I expect?
We know the answers.
The Investropa team has done their homework on this market. Actually, we've organized all our findings in a pack. Get it now.
In this article, get ready to receive valuable insights from us.
How's the real estate market in Copenhagen?
Is the property market going up or down? Let's look at fresh data and statistics.
Property types
In Copenhagen, there are various types of properties available for sale, ranging from cozy apartments in charming neighborhoods to spacious houses in suburban areas.
You can find modern condos with sleek designs and convenient amenities, historic townhouses boasting unique architectural details, and contemporary family homes with gardens for outdoor enjoyment.
Additionally, some properties might be located near waterfronts, parks, or bustling city centers, providing a diverse array of choices to suit different preferences and lifestyles.
Buy or rent?
(In case you want it for yourself, not for rental purposes)
If Copenhagen has captured your heart as your city of choice, you might be considering whether it's better to buy a property or opt for renting in this Danish capital.
Obviously, it's better to buy if you're looking for a long-term investment with potential for capital appreciation and the ability to build equity.
Our advice? Use the property price-to-rent ratio as your decision-making compass. This metric shows the relationship between rental income and the cost of buying the property.
According to Numbeo, the property price-to-rent ratio in Copenhagen is around 21.36, which is around the world average.
To put it simply, it usually takes an average of 21 years of rental payments to buy a property in Copenhagen.
Property prices in Copenhagen
On average, according to the last data from Statistics Denmark, buying a property in Copenhagen would cost you around $7,200 per square meter.
Naturally, prices are quite spread out. The value of a square meter for an apartment in Copenhagen city center might differ from a suburban home in Amager. We actually offer a more in-depth analysis in our pack for buying property in Copenhagen and in Denmark.
To give you a better idea, it is 2.6 times less than the prices in the center of New York.
Also, housing prices in Copenhagen are 12% cheaper than in Stockholm.
The most expensive neighbourhoods in Copenhagen are probably Frederiksberg, Østerbro and Hellerup, while the cheapest neighbourhoods are generally found in the outer suburbs.
Trends
First and foremost, we have to acknowledge that Denmark is, today, one of the most stable countries in the world. The last Fragile State Index that has been reported for this place is 18.1.
Keep this in mind when thinking about the viability of buying a property in Copenhagen.
Also, according to the International Monetary Fund (IMF), Denmark's economy is expected to soar by 6% in the coming 5 years, resulting in an average GDP growth rate of 1.2%.
If you want to invest in real estate in Copenhagen it's a good thing because individuals are becoming wealthier, leading to a probable rise in housing prices.
Also, in Denmark, the average GDP per capita has changed by 6.3% over the last 5 years. It's a solid number.
These are cues signaling that property prices in Copenhagen might go up in 2024 and during the coming years.
Looking for more updated data? We've done a big-picture study to find out if it's a good idea to purchase property in Denmark right now.
Buying property in Copenhagen
Buying real estate in Copenhagen can be difficult due to the lack of reliable and up-to-date information available. That's why we have created the pack to buy property in Copenhagen and in Denmark.
Buying process
Within our pack, we've covered the entire buying process extensively. This includes a detailed breakdown of prices and yields based on the area, advice on negotiating prices, and information about obtaining a mortgage.
Now, we're providing you with a simplified version.
This is the step-by-step process to purchase a property in Copenhagen:
- Determine your budget and preferred district in Copenhagen.
- Engage a local estate agent with knowledge of Copenhagen's property market.
- Explore available properties, considering local factors like green spaces and transportation.
- Conduct due diligence, including checking the "Boligrapport" (property report) and "Bilbogen" (car status report, if parking is included).
- Obtain mortgage pre-approval from a Danish bank or lender.
- Submit a purchase offer (købstilbud) through your agent.
- Negotiate terms, sign a "Købsaftale" (purchase agreement), and pay a deposit.
- Hire a lawyer for title research and handling the "Refusionsopgørelse" (financial settlement) at closing.
- Schedule a "Fremvisningstilladelse" (viewing permit) from the local municipality for inspection.
- Complete required paperwork like "Betalingspåkrav" (payment request) and "Skøde" (property deed).
- Attend the closing meeting ("Overtagelsesdag") to transfer ownership and payment.
- Register the property at the "Tinglysningsretten" (The Danish Land Registry).
Also, if you're not from the country, you might want to check our article on how to buy property as a foreigner in Denmark.
Make a profitable investment in Copenhagen
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Where to find a property
Discover properties in Copenhagen through these websites.
- Housing Denmark - Providing support in finding homes, renting out properties, and managing project rentals.
- Findboliger - One of Denmark's largest rental property platforms with over 20 years of experience in the rental market.
- BoligPortal - Offering a variety of rental properties in popular Danish cities.
- Engel & Volkers - Presenting a selection of properties available for purchase, including details on prices, surface area, and location.
-
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Also, know that we have included contacts of real estate agencies, property lawyers, moving companies, expats communities and more in our pack for buying property in Denmark.
What you can get
As mentioned before, the average price per sqm in Copenhagen is $7,200. The cost of a one-bedroom property (60 sqm) is approximately $432,000, and a two-bedroom (85 sqm) would be around $612,000.
However, prices will change based on both the property itself and its location.
You can expect prices to be steeper in the upscale parts of Copenhagen. If the idea is an apartment in Frederiksberg, you might need to budget around $830,000, whereas a property in Østerbro could be priced at roughly $770,000.
But, there are cheaper places. You can find a house in Amager Øst for $550,000 or a house in Tingbjerg that's priced at $450,000.
Find a more detailed price list in our full pack for buying property in Denmark.
Common pitfalls
Here are the main pitfalls specific to buying a property in Copenhagen, Denmark:
- Stricter housing regulations: Danish laws on property ownership and rental restrictions can be complex to navigate.
- High property transfer tax: Denmark has a significant one-time property transfer tax that can increase the overall cost.
- Long buying process: The home-buying process can be lengthy, involving multiple legal steps and paperwork.
- Limited freehold properties: Most properties in Copenhagen are leasehold, which may lead to uncertainty over long-term ownership.
- Cultural differences: Understanding Danish customs and etiquette when dealing with real estate transactions is crucial.
- Cold and dark winters: Consider the potential impact of the Nordic climate on the property's living conditions.
- Communal living challenges: Some properties in Copenhagen have shared communal spaces, requiring cooperation and management.
- Potential language barriers: Danish is the primary language, and navigating contracts and negotiations might be challenging for non-Danish speakers.
We don't want this to happen to you, so we have included a full checklist for your property investment in our pack of documents. Avoid these mistakes and save a lot of money.
Everything you need to know is included in our Denmark Property Pack
Living in Copenhagen
Copenhagen is a vibrant, livable city with great infrastructure, plenty of cultural attractions, and an excellent quality of life for those looking to buy property.
Cost of living
The cost of living in Copenhagen is relatively high, and is among the most expensive cities in Europe. Prices for groceries, rent, and transportation are all higher than many other cities in the region.
Here are some examples to better understand the cost of living in Copenhagen, Denmark:
- A glass of Danish craft beer (e.g., Mikkeller) at a local bar: $6-$8.
- Rent for a one-bedroom apartment in the trendy Nørrebro neighborhood: $1,800-$2,800 per month.
- Monthly Rejsekort public transportation pass for zones 1-99: $80-$120.
- A bottle of Danish mineral water (e.g., Ørbæk) at a grocery store: $2-$3.
- Utilities (electricity, heating, cooling) for an 85m² apartment in Copenhagen: $150-$200.
- A smørrebrød, a traditional Danish open sandwich, at a restaurant: $12-$18.
- Entrance fee to the Tivoli Gardens, a famous amusement park: $15-$20.
- Health insurance coverage for a family of four: $300-$500 per month.
Neighbourhoods
We want to show information in a way that is easy to understand. So, we made a table that shows the different parts of Copenhagen. For yields, prices and rents, check our property pack.
Neighborhood Description Strengths Weaknesses Indre By
Indre By is the historic city center of Copenhagen, characterized by charming old streets, iconic landmarks like the Round Tower and the colorful Nyhavn waterfront. It's a lively area with numerous cafes, restaurants, and shops.
Historical charm, vibrant atmosphere, easy access to major attractions.
Higher cost of living, can be crowded with tourists.
Nørrebro
Nørrebro is a diverse and trendy neighborhood with a multicultural atmosphere. It's known for its hip cafes, street art, and a wide range of international cuisine options.
Cultural diversity, vibrant nightlife, artistic scene.
Can be noisy, parking can be challenging.
Vesterbro
Vesterbro is a hip and bohemian area with a mix of trendy bars, vintage shops, and the popular Meatpacking District filled with restaurants and nightlife spots. It has a relaxed vibe and a young, creative community.
Trendy and artistic, great dining and nightlife options, good public transport connections.
Can be crowded and noisy, limited green spaces.
Østerbro
Østerbro is a family-friendly neighborhood with green parks, waterfront promenades, and beautiful residential streets. It's a peaceful and safe area with good schools and recreational facilities.
Family-oriented, parks and recreational areas, quieter atmosphere.
Less vibrant nightlife, slightly distant from the city center.
Frederiksberg
Frederiksberg is an upscale neighborhood with elegant streets, green parks, and the beautiful Frederiksberg Palace. It offers a refined living environment with high-end shops and restaurants.
Upscale and elegant, beautiful parks, exclusive shopping options.
Higher cost of living, limited availability of affordable housing.
Amager
Amager is a diverse area with a mix of residential neighborhoods, green spaces, and the popular Amager Beach Park. It's well-connected to the airport and offers a relaxed lifestyle.
Close to the beach, good public transport links, multicultural.
Some areas can be industrial, limited cultural attractions.
Christianshavn
Christianshavn is a unique neighborhood with a bohemian atmosphere and picturesque canals. It's home to the alternative community of Christiania and offers a blend of historical and modern architecture.
Quaint canals, alternative and artistic vibe, close-knit community.
Can be crowded with tourists, limited parking options.
Valby
Valby is a residential neighborhood with a mix of apartments and houses, green parks, and the popular Copenhagen Zoo. It's a peaceful area with a local community feel.
Family-friendly, green areas, close to the zoo.
Less nightlife, longer commute to the city center.
Life in Copenhagen
Copenhagen is a major economic hub in the Nordic region, with a strong high-tech sector, a vibrant shipping industry, and a well-developed financial services sector. It is also home to a number of large companies, such as Maersk, Novo Nordisk, and Carlsberg, and is one of the most innovative cities in Europe.
Referencing the IMF's data, Copenhagen's GDP contributes to almost 34% of Denmark's GDP. That's a good thing because, when you buy property in a city with a strong economy, your investment is usually safer and not as affected by changes in the market.
What expats usually like the most in Copenhagen is the vibrant culture and the great quality of life. They particularly enjoy exploring the city's many parks and canals, as well as its wide selection of cafes, restaurants, and nightlife.
Another great point to note is that Copenhagen is an incredibly safe city, with a crime index of only 27, which is a really good score. Copenhagen's culture of social responsibility, collective trust, and shared values has helped to create a safe and secure environment with very little crime.
A good point for a property investor - Copenhagen has an extensive public transportation system, including a metro, regional rail, and bus services.
Access to healthcare in Copenhagen is more than excellent, with a Healthcare Index of 77. A strong healthcare setup always reflects positively on real estate.
Finally, it is worth noting that the University of Copenhagen ranks among the top 150 universities in the world.
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Renting out in Copenhagen
For those aiming to buy property solely for renting out and earning income.
Long-term
Tenant Profiles in Copenhagen
According to the data reported by Wikipedia, the home ownership rate in Denmark is 59%, which is not much.
It means that, if you decide to buy and rent out in Copenhagen, there will be a lot of people who can become your potential tenants.
If you decide to buy and rent out to long-term tenants, you should target young professionals, expats, and students looking for an affordable place to stay in Copenhagen. Families, retirees, and people on a lower income may also be interested in renting in Copenhagen.
Here is a little summary table we've made for you.
Property type and area Profiles of potential tenants What they are looking for Expected monthly rent in $ Apartment in Indre By
Professionals, students
City center, cultural attractions
$1,800 - $3,500
Apartment in Nørrebro
Youthful professionals, artists
Trendy vibe, cafes, nightlife
$1,200 - $2,500
Studio in Frederiksberg
Students, young couples
Green spaces, local shops
$900 - $1,800
Apartment in Østerbro
Families, professionals
Family-friendly, parks
$1,500 - $3,000
House in Amager
Expats, larger families
Suburban living, space
$2,500 - $4,500
Apartment in Vesterbro
Young professionals, couples
Central location, cafes
$1,200 - $2,500
Studio in Valby
Students, freelancers
Quiet, affordable
$800 - $1,500
Rental yields
Nowadays, rental yields in Copenhagen are usually below 5%. It's not much. A good rental yield is usually around 7% or higher. Maybe, you knew it already.
The best rental yields in Copenhagen are typically found in the city center and nearby suburbs. These areas tend to have a higher demand for rental properties due to their proximity to amenities, public transport, and employment opportunities.the reports and analyses we have made.
Finally, be aware that rental incomes in Copenhagen are taxed at 52%, which is very high.
Short-term
You could also decide to rent short-term to business travelers, tourists, or students studying in Copenhagen. Alternatively, you could rent to people relocating to the city who need a place to stay before finding a permanent residence.
If you decide to go with that option, look for properties in Vesterbro, Nørrebro and Frederiksberg. These are all popular areas for students and young professionals, and therefore offer a great potential for short-term rentals.
Currently, there are approximately 10,000 active Airbnb listings in Copenhagen, reflecting a highly dynamic and bustling short-term rental market. The average daily rate stands around $162, which is quite high.
You have the opportunity to generate a nice additional income stream then. According to online testimonials and analytics platform like AirDNA, Guesty and Inside Airbnb, people who offer short-term rentals in Copenhagen can make around $1800 per month. Also, the average occupancy rate is estimated at 82%.
Is it worth buying real estate in Copenhagen then?
Buying a property in Copenhagen is a smart move for those planning to settle down in this vibrant city for the long haul.
Copenhagen boasts a stable economy, a strong GDP growth rate, and signs of rising property prices. If you're in it for the long-term, buying offers the potential for capital appreciation and equity building. Plus, the property price-to-rent ratio is relatively favorable, meaning it takes around 21 years of rental payments to buy a property, which can be an attractive proposition for those looking to secure their future in this Scandinavian gem.
However, it's a different story if you're a short-term visitor or on a tight budget. Copenhagen isn't known for affordability, and the city's high property transfer tax and complex housing regulations can be major roadblocks for those planning a short stay. Additionally, navigating the property market as a non-Danish speaker can be challenging. If you're not committed to a long stay or can't afford the high costs associated with property ownership, renting might be a more suitable option.
In a nutshell, buying in Copenhagen is a solid investment for the long-term resident seeking financial stability and equity growth, but it's not the best choice for those with short stays, limited budgets, or a preference for a hassle-free living situation.
Make sure you understand the real estate market in Copenhagen
Don't rush into buying the wrong property in Denmark. Sit, relax and read our guide to avoid costly mistakes and make the best investment possible.
The content provided here is for informational purposes only and does not imply endorsement or advice. While we strive for accuracy, we do not guarantee the completeness or reliability of the information, including text, images, links, or other elements in this material. Following the content and analyses presented here does not assure specific outcomes. For guidance tailored to your individual circumstances, it is recommended to consult with a professional, such as a lawyer, accountant, or business advisor.